European officials have signaled they expect Russia to back
a solution keeping Cyprus afloat, Schaeuble told legislators
from Chancellor Angela Merkel’s Christian Democratic-led bloc,
according to a party official who was present.

A bailout for the Mediterranean island nation, the fifth
since the European debt crisis broke out more than three years
ago, will take more time to negotiate with Cyprus’s
international creditors, Schaeuble told lawmakers.

German parliament members from inside and outside Merkel’s
governing coalition have voiced concern about a bailout because
of allegations of tax fraud among banks in Cyprus and deposits
by Russian billionaires exploiting a favorable tax regime.
Rainer Bruederle, the caucus leader for Merkel’s Free Democratic
coalition partner, told Bild newspaper Jan. 9 that there are
“too many question marks” surrounding aid for Cyprus.

Schaeuble told lawmakers from Merkel’s CDU and its CSU
Bavarian sister party that no concrete numbers for Cyprus’s
financial needs have been finalized since negotiations began in
earnest in November, said the official, who spoke on condition
of anonymity according to official protocol.

Asset Sales

The German minister said officials are closely watching
next month’s presidential election in Cyprus, which will produce
a successor to President Demetris Christofias, the official
said. Christofias, a communist, rejects selling state assets as
part of a finance package.

The so-called troika of international creditors -- the
International Monetary Fund, the European Commission and the
European Central Bank -- will have difficulty reaching an
agreement without privatization of Cypriot assets, Schaeuble
told the lawmakers in Berlin, according to the official.

Merkel threw her support behind Nicos Anastasiades, the
head of Cyprus’s center-right DISY opposition, during a visit to
the island last week. Christofias told reporters today in
Strasbourg that a Cyprus aid deal is being delayed by the
government’s differences with the IMF over Cypriot banks’
capital needs.